Minister must account for 142 Prasa contracts worth R24 Billion under investigation

Dear Editor

The DA will request the Standing Committee on Public Accounts (Scopa) to summon the Minister of Transport, Dipuo Peters, to present a plan on how she will hold all relevant parties accountable, after the Committee revealed today that 142 Passenger Rail Agency of South Africa (Prasa) contracts worth R24 billion are being investigated for possible corruption.

In the meeting today, the DA interrogated Popo Molefe , Prasa Board Chairperson, over the R4 billion irregular expenditure recorded for the financial year. The PFMA, which gives effect to Section 216 (1) of the Constitution in prescribing measures to ensure both transparency and expenditure control in each sphere of government, does so by introducing Generally recognised accounting practices (GAAP). This, together, with transparency, lacked in Prasa. Adequate expenditure controls were virtually absent and to top it all a lack of consequence management is evident.

Prasa was one of six entities and departments responsible for 30% of the total irregular expenditure.

The A-G report highlighted the importance of leadership and oversight. With these clearly lacking, the entity recorded a loss of R2.8 billion in the 2015/16 financial year. All of this prompted the DA to request the committee to call the Minister to account for the lack of oversight at Prasa.

International credit ratings agencies are in the country this month to review South Africa’s sovereign rating amid concerns that the country may be downgraded to junk later next month. Among many issues, they are expected to be looking at burning points such as irregular and wasteful expenditure. They are also going to be looking at governance in the country’s parastatals and the prevailing political landscape. Prasa has been cited as the worst performer with regards to possible corruption and maladministration, which does not bode well for our country’s rating prospects.

The failure of the department to spend finances and procure by the book in Prasa left the door open for conflicts of interest and possible corruption.

The DA supports the remedial action proposed by the A-G’s office, which also says that “fit-for-purpose, qualified and competent people must be placed in positions of responsibility across our state institutions.”

It is only when we stringently apply the law, have strong internal controls and give due regard to the recommendations of the auditor-general, that we may decisively deal with fruitless and wasteful, irregular and unauthorised expenditure which, if left unattended, become pathways to corruption, maladministration and unethical behaviour.

Regards

David Ross MP
DA Spokesperson on the Standing Committee on Public Accounts